Arcosa (ACA) Slid Amid Concerns Over Weaker Construction Spending and Aggregate Demand
Loomis Sayles, an investment management company, released its 'Small Cap Value Fund' first quarter 2025 investor letter. A copy of the letter can be downloaded here. The first quarter of 2025 saw negative returns for US equity markets, with large-cap indices outperforming small caps. Value stocks were stronger than growth stocks, driven by strong performance in financials and real estate, while growth sectors struggled. In the first quarter, the fund returned 0.16%, outperforming the Russell 2000 Value Index's -1.06% return. In addition, please check the fund's top five holdings to know its best picks in 2025.
In its first-quarter 2025 investor letter, Loomis Sayles Small Cap Value Fund highlighted stocks such as Arcosa, Inc. (NYSE:ACA). Arcosa, Inc. (NYSE:ACA) is a US-based company that offers infrastructure-related products and solutions. The one-month return of Arcosa, Inc. (NYSE:ACA) was 1.16%, and its shares gained 5.42% of their value over the last 52 weeks. On June 11, 2025, Arcosa, Inc. (NYSE:ACA) stock closed at $89.30 per share, with a market capitalization of $4.359 billion.
Loomis Sayles Small Cap Value Fund stated the following regarding Arcosa, Inc. (NYSE:ACA) in its Q1 2025 investor letter:
"Arcosa, Inc. (NYSE:ACA) has been strategically simplifying its business to focus on construction materials. In August 2024, it announced the acquisition of a US based materials company which increased its construction materials segment to nearly two-thirds of total earnings while increasing margins. The share price rallied on the news during the fourth quarter, but during the first quarter of 2025, the share price declined due to concerns about weaker construction spending and the impact on construction aggregates demand. In addition, investors have become cautious regarding its wind power business which could be negatively impacted by policy changes under the new administration. We maintain a positive pricing outlook for the aggregates business, even with a more modest construction outlook and believe Arcosa will continue reshaping its business into a more durable and better valued enterprise."
A construction site at night with long exposure illuminating specialty materials and trench shields.
Arcosa, Inc. (NYSE:ACA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 23 hedge fund portfolios held Arcosa, Inc. (NYSE:ACA) at the end of the first quarter, which was 23 in the previous quarter. While we acknowledge the potential of Arcosa, Inc. (NYSE:ACA) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.
In another article, we covered Arcosa, Inc. (NYSE:ACA) and shared the list of stocks that are about to explode. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.
Disclosure: None. This article is originally published at Insider Monkey.
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